Adam Rosen - Lead financial writer
First started in 2007 by Vodafone, M-Pesa has seen huge growth over the last decade. M-Pesa users with a mobile device can transfer funds locally and internationally and use M-Pesa as a form of payment. The service has since expanded to other countries in Africa, as well as in Eastern Europe and South Asia.
Vodafone Group plc is a British multinational telecommunications company. It is headquartered in London, England and provides a range of telecommunications services, including mobile network operator services, fixed line internet services, digital television, and IT services. Vodafone is one of the largest mobile telecommunications companies in the world and operates in many countries across Europe, Africa, Asia, and Oceania. It offers mobile voice and data services, broadband and internet services, as well as various enterprise-level solutions for businesses.
M-Pesa has over 200 million customers worldwide. The service is particularly popular in Africa, where it has the highest number of users. According to Vodafone, which operates M-Pesa in several countries, as of 2021, M-Pesa has more than 30 million customers in Kenya alone, and more than 17 million customers in Tanzania. The service also has a significant presence in other African countries such as Ghana, Egypt, Mozambique and Lesotho.
Please note that these are the countries where M-Pesa is currently available, but depending on the region and the country, the services offered by M-Pesa might vary.
M-Pesa works by allowing users to deposit money into an account stored on their mobile phone, which can then be used for a variety of transactions. To use M-Pesa, users need to have a mobile phone and a SIM card from a participating mobile network operator. Users can then go to an authorized M-Pesa agent or participating bank, where they can deposit cash into their M-Pesa account.
Once the account is funded, users can then use their mobile phone to send money to other M-Pesa users, pay bills, purchase mobile phone credit, or withdraw cash. The transactions are done by sending a text message or using a mobile app. Users can also check their account balance and transaction history using their mobile phone.
Users can also use M-Pesa to pay for goods and services at participating merchants, by scanning a QR code or using a mobile app to complete the transaction.
Because the service is based on mobile technology, it is accessible to people who may not have a bank account or access to traditional banking services, making it a powerful tool for financial inclusion.
Yes, M-Pesa is a regulated financial service. The operation of M-Pesa is subject to various regulations, laws and compliance requirements of the countries where it operates. The service must comply with regulations from central banks, financial regulators and other government agencies.
For example, in Kenya, M-Pesa is regulated by the Central Bank of Kenya, which oversees the operations of mobile money transfer services and ensures compliance with anti-money laundering and countering the financing of terrorism (AML/CFT) regulations.
Similarly, in Tanzania, M-Pesa is regulated by the Bank of Tanzania, which has issued guidelines for mobile money service providers, including requirements for customer due diligence and record-keeping, and has established a framework for the registration, licensing, and supervision of mobile money service providers.
In general, M-Pesa is required to comply with all the regulations to ensure the safety and security of the transactions and customers funds, as well as to prevent money laundering and financing of illegal activities.
M-Pesa has seen significant growth since its launch in 2007, both in terms of the number of customers and the number of countries where it is available. The service initially launched in Kenya and Tanzania, where it quickly gained popularity among users who did not have access to traditional banking services.
In the following years, M-Pesa expanded to other countries in Africa, including Ghana, Egypt, Mozambique and Lesotho, and later on to other regions such as Eastern Europe and South Asia, like Afghanistan, India and Romania.
The growth of M-Pesa can be attributed to several factors, including:
The service has also been able to cater to a wide range of customers, from low-income individuals to small and medium-sized enterprises (SMEs), and even large corporations, providing a wide range of services that enables people to access financial services, pay bills and make transactions.
As a result, M-Pesa has become an important tool for financial inclusion and has had a significant impact on the economies of the countries where it operates.